Domino effect

When less-than-truckload carrier Consolidated Freightways abruptly closed its doors on Labor Day, 15,500 Teamsters lost their jobs, but the extent of the damage to the Teamsters union has yet to be determined. It could go either way. It's a bit strong to say it's a devastating blow, says Rob Black, a Teamsters spokesman in Washington, DC. We'll have to wait and see how many CF drivers get other driver

When less-than-truckload carrier Consolidated Freightways abruptly closed its doors on Labor Day, 15,500 Teamsters lost their jobs, but the extent of the damage to the Teamsters union has yet to be determined. It could go either way.

“It's a bit strong to say it's a devastating blow,” says Rob Black, a Teamsters spokesman in Washington, DC. “We'll have to wait and see how many CF drivers get other driver jobs.”

Already, CF's main LTL competitors — Yellow, Roadway and ABF — are shopping for drivers. In the Portland area alone, Roadway is considering hiring about 40 former CF workers; Yellow may take 20 to 30 and ABF is looking at about a half dozen, according to local union officials. Similar reports are coming in from around the country. “It's too early to stick a number on it,” says Black.

With CF's demise, about $1.5 to 2 billion in freight traffic is up for grabs and competitors' stock prices got a blip after the CF announcement in anticipation of them picking up the slack. Drivers will most likely go to carriers that have taken on CF's largest customers, which include Home Depot, the U.S. Postal Service and GE.

The wild card in all of this is the smaller, non-union LTLs that have been chipping away at the large carriers. If these carriers end up catching some of CF's customers, the drivers will follow but they won't take their union affiliation with them. Not only will this highly trained workforce make the smaller carriers stauncher competition for the larger unionized LTLs, but it could spell trouble for long-term union enrollment, according to Harvey Donaldson, Director of the Logistics Institute at Georgia Tech.

Donaldson notes that because CF paid high wages and offered good benefits, former drivers might not be able to get comparable behind-the-wheel jobs at all and may decide to leave the business, further eroding the Teamsters' ranks.

Another unknown is how aggressively package companies like UPS and FedEx will try to pick up CF's business. Recently, they have been handling larger and larger packages. They may pick up some CF drivers, too, but there have been few reports so far.

Teamster president Jim Hoffa said publicly that CF was destroyed by corporate mismanagement because it did not adjust to the demands of the market, as did other successful unionized companies.

“The union had been trying to meet for more than a year with CF CEO Pat Blake and his management team to offer assistance in addressing the company's problems,” Hoffa said. Management refused to meet with union representatives, he said, until John Brincko, the new CEO, took over and agreed to meet several months ago. By that time, however, it was too late to fix the problems.

CF's failure is an immediate tragedy for drivers and their families. But the long-term fallout for the union will be revealed in less than seven months when negotiations begin on the National Master Freight Agreement with the remaining three large LTLs and other carriers. The current agreement covers 80,000 parties.

Considering how many union drivers might be lost because of CF's closure, it's uncertain how much clout the Teamsters will have in those talks.